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Obvious Error Submission



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Guidelines for Obvious Filing Submission for Nasdaq PHLX/NOM/BX

Documentation

  • Market participants may file a request electronically. If there are problems with an electronic submission, please call 215.496.5295
  • All submissions must include all of the requested supportive information, or it will be considered deficient and not accepted.

Deadline

  • Submissions must be received for non-customer orders (B/D, Firm and Pro Customer), Lead Market Makers, Market Makers, ROTs, SQTs and RSQTs within 15 minutes of the execution time.
  • Submissions must be received for customer orders within 30 minutes of the execution time.

The Exchange may nullify a transaction, adjust the execution price of a transaction that results in an Obvious Error, or rule that a transaction shall stand as executed.

Definition of Obvious Error

An Obvious Error will be deemed to have occurred when the execution price of a transaction is higher or lower than the Theoretical Price for a series by an amount equal to at least the amount shown below:

For equity, index, ETF and currency options


Theoretical price Minimum Amount
Below $2.00 $0.25
$2 - $5 $0.40
Above $5 - $10 $0.50
Above $10 - $20 $0.80
Above $20 - $50 $1.00
Above $50 - $100 $1.50
Above $100 $2.00

Determination of Theoretical Price:

Upon receipt of a request for review and prior to any review of a transaction execution price, the “Theoretical Price” for the option must be determined. For purposes of this Rule, if the applicable option series is traded on at least one other options exchange, then the Theoretical Price of an option series is the last NBB just prior to the trade in question with respect to an erroneous sell transaction or the last NBO just prior to the trade in question with respect to an erroneous buy transaction unless one of the exceptions below exists. For purposes of this provision, when a single order received by the Exchange is executed at multiple price levels, Theoretical Price for the execution at the initial price level will be the last NBB and last NBO just prior to the Exchange’s receipt of the order, and the Theoretical Price for all subsequent executions at other price levels will be determined by the Exchange.

Transactions at the Open. For a transaction occurring as part of the Opening Process the Exchange will determine the Theoretical Price if there is no NBB or NBO for the affected series just prior to the erroneous transaction or if the bid/ask differential of the NBB and NBO just prior to the erroneous transaction is equal to or greater than the Minimum Amount set forth in the chart below. If the bid/ask differential is less than the Minimum Amount, the Theoretical Price is the NBB or NBO just prior to the erroneous transaction.


Bid Price at Time of Trade Minimum Amount
Below $2.00 $0.75
$2 - $5 $1.25
Above $5 - $10 $1.50
Above $10 - $20 $2.50
Above $20 - $50 $3.00
Above $50 - $100 $4.50
Above $100 $6.00

No Valid Quotes. The Exchange will determine the Theoretical Price if there are no quotes or no valid quotes for comparison purposes. Quotes that are not valid are all quotes in the applicable option series published at a time where the last NBB is higher than the last NBO in such series (a “crossed market”), quotes published by the Exchange that were submitted by either party to the transaction in question, and quotes published by another options exchange against which the Exchange has declared self-help.

(A) all quotes in the applicable option series published at a time where the last NBB is higher than the last NBO in such series (a "crossed market");

(B) quotes published by the Exchange that were submitted by either party to the transaction in question;

(C) quotes published by another options exchange if either party to the transaction in question submitted the quotes in the series representing such options exchange's best bid or offer, provided that the Exchange will only consider quotes invalid on other options exchanges in up to twenty-five (25) total options series that the party identifies to the Exchange the quotes which were submitted by such party and published by other options exchanges; and

(D) quotes published by another options exchange against which the Exchange has declared self-help.

Wide Quotes. The Exchange will determine the Theoretical Price if the bid/ask differential of the NBB and NBO for the affected series just prior to the erroneous transaction was equal to or greater than the Minimum Amount set forth below and there was a bid/ask differential less than the Minimum Amount during the 10 seconds prior to the transaction. If there was no bid/ask differential less than the Minimum Amount during the 10 seconds prior to the transaction then the Theoretical Price of an option series is the last NBB or NBO just prior to the transaction in question.


Bid Price at Time of Trade Minimum Amount
Below $2.00 $0.75
$2 - $5 $1.25
Above $5 - $10 $1.50
Above $10 - $20 $2.50
Above $20 - $50 $3.00
Above $50 - $100 $4.50
Above $100 $6.00

Customer Transactions Occurring Within 10 Seconds or Less After an Opening or Re-Opening

  • For Customer trades occurring within 10 seconds or less after a market open or a reopen after a market halt, the Exchange will determine the Theoretical Price if the bid/ask differential of the NBB and NBO for the affected series just prior to the erroneous transaction was deemed wide (equal to or greater than the Minimum Amount detailed below), and there was a bid/ask differential not wide (less than the Minimum Amount detailed below) anytime within 10 seconds following a market open/reopen.

  • For Customer trades occurring within 10 seconds or less after a market open or a reopen after a market halt, if the bid/ask differential of the NBB and NBO for the affected series prior to the erroneous transaction was always wide (equal to or greater than the Minimum Amount detailed below), the Theoretical Price will be the last NBB or NBO just prior to the Customer transaction in question.

    • Bid Price at Time of Trade Minimum Amount
    Below $2.00 $0.75
    $2 - $5 $1.25
    Above $5 - $10 $1.50
    Above $10 - $20 $2.50
    Above $20 - $50 $3.00
    Above $50 - $100 $4.50
    Above $100 $6.00

Additional Information

  • Obvious Error Policy
  • Nasdaq MarketWatch at 800.211.4953 or 301.978.8501.
  • Nasdaq PHLX at 215.496.5295 or 1-800-THE-PHLX, #9